EUR/USD technical analysis: Bullish hammer suggests scope for retest of recent highs

• Tuesday's bullish hammer indicates EUR/USD could soon retest of recent highs near 1.1180. 
• The daily chart also shows a failed breakdown, a strong bullish signal. 

EUR/USD's pullback has ended and the pair could soon challenge recent highs near 1.1180, according to technical charts. 

The common currency carved out a bullish hammer candle, validating the preceding day's bullish inside day candle. 

The back-to-back bullish candlesticks have invalidated the downside break of the ascending trendline connecting Oct. 1 and Oct. 15 lows confirmed on Oct. 25. A failed breakdown is a powerful bullish signal.

Therefore, the recent high of 1.1180 could come into play in the next couple of days. A violation there would expose the 200-day moving average (MA) at 1.12.

As of writing, the pair is trading largely unchanged on the day at 1.1109.

Daily chart

Trend: Bullish

Technical levels